[Federal Register Volume 63, Number 132 (Friday, July 10, 1998)]
[Proposed Rules]
[Pages 37466-37474]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18303]



[[Page 37465]]

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Part III





Department of Education





_______________________________________________________________________



34 CFR Part 304



Special Education; Personnel Preparation to Improve Services and 
Results for Children With Disabilities; Proposed Rule

  Federal Register / Vol. 63, No. 132 / Friday, July 10, 1998 / 
Proposed Rules  

[[Page 37466]]


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DEPARTMENT OF EDUCATION

34 CFR Part 304

RIN 1820-AB46


Special Education--Personnel Preparation To Improve Services and 
Results for Children with Disabilities

AGENCY: Office of Special Education and Rehabilitative Services of 
Special Education Services, Department of Education.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Secretary proposes to establish regulations governing 
specific provisions of the Personnel Preparation Program to Improve 
Services and Results for Children with Disabilities. The regulations 
are needed to implement recently enacted changes to the Individuals 
with Disabilities Education Act (IDEA or the Act) that were adopted as 
part of the IDEA Amendments of 1997. Specifically, the regulations 
would establish procedures to implement section 673(h) of IDEA which 
requires that individuals who receive a scholarship through personnel 
preparation projects funded under the Act must subsequently provide 
special education and related services to children with disabilities 
(or, for leadership personnel, work in areas related to their 
preparation) for a period of two years for every year for which 
assistance was received. Scholarship recipients who do not satisfy 
their service obligation must repay all or part of the cost of their 
assistance in accordance with regulations issued by the Secretary. 
These proposed regulations would implement requirements governing, 
among other things, the service obligation for scholars, oversight by 
grantees, repayment (or ``payback'') of scholarship, and procedures for 
obtaining deferrals or exemptions from service or repayment 
obligations.

DATES: Comments must be received by the Department on or before 
September 8, 1998.

ADDRESSES: All comments concerning these proposed regulations should be 
addressed to Sherron Dunmore, U.S. Department of Education, 600 
Independence Avenue, SW., Room 4628, Switzer Building, Washington, DC 
20202-2641. Comments may also be sent through the Internet: 
[email protected]
    You must include the term ``payback'' in the subject line of your 
electronic message.
    Comments that concern information collection requirements must be 
sent to the Office of Management and Budget at the address listed in 
the Paperwork Reduction Act section of this preamble. A copy of those 
comments may also be sent to the Department representative named in 
this section.

FOR FURTHER INFORMATION CONTACT: Renee Bradley, U.S. Department of 
Education, 600 Independence Avenue, Washington, DC 20202-2641. 
Telephone: (202) 358-2849. Individuals who use a telecommunications 
device for the deaf (TDD) may call the TDD number at (202) 205-9374 
between 8 a.m. and 8 p.m., Eastern time, Monday through Friday.
    Individuals with disabilities may obtain this document in an 
alternate format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 
paragraph.

Invitation To Comment

    Interested persons are invited to submit comments and 
recommendations regarding these proposed regulations. All comments 
submitted in response to these proposed regulations will be available 
for public inspection, during and after the comment period, in Room 
3070, Mary E. Switzer Building, 330 C Street SW, Washington DC, between 
the hours of 8:30 a.m. and 4:00 p.m., Eastern time, Monday through 
Friday of each week except Federal holidays.
    On request the Department supplies an appropriate aid, such as a 
reader or print magnifier, to an individual with a disability who needs 
assistance to review the comments or other documents in the public 
rulemaking docket for these proposed regulations. An individual with a 
disability who wants to schedule an appointment for this type of aid 
may call (202) 205-8113 or (202) 260-9895. An individual who uses a TDD 
may call the Federal Information Relay Service at 1-800-877-8339, 
between 8 a.m. and 8 p.m., Eastern time, Monday through Friday.
    To assist the Department in complying with the specific 
requirements of Executive Order 12866 and its overall requirement of 
reducing regulatory burden, the Secretary invites comments on whether 
there may be further opportunities to reduce any regulatory burdens 
found in these proposed regulations.

SUPPLEMENTARY INFORMATION: IDEA personnel training grants are intended 
to increase the number and quality of personnel available to provide 
special education and related services to children with disabilities, 
to provide early intervention services to infants and toddlers with 
disabilities, and their families, and to serve in leadership positions 
in special education, related, or early intervention services. 
Shortages in school districts across the country of qualified personnel 
who can address the educational needs of children with disabilities are 
well documented. In the past, however, some individuals who received 
financial support through IDEA in order to obtain degrees or other 
types of certification subsequently entered careers in which they did 
not focus on serving children with disabilities under IDEA.
    Section 673(h) of the Act was adopted as part of the IDEA 
Amendments of 1997 as a means of ensuring that individuals who receive 
scholarships under IDEA-supported personnel training projects provide 
special education or related services to children with disabilities 
under Part B of the Act or early intervention services to infants and 
toddlers with disabilities, and their families, under Part C of the 
Act. Similarly, individuals who receive scholarships under IDEA 
training projects for leadership personnel must work in an area related 
to their preparation. Scholarship recipients who choose not to enter 
the special education, related service, or early intervention field are 
obligated to pay back their scholarship so that IDEA personnel training 
monies may be preserved for purposes of increasing the availability of 
individuals qualified to provide services under IDEA.

Subpart A--General

    As stated in proposed Sec. 304.1, individuals who receive 
scholarship assistance from projects funded under the Personnel 
Preparation to Improve Services and Results for Children with 
Disabilities Program (program) are required to complete a service 
obligation, or repay all or part of the costs of such assistance. The 
service requirement included in the proposed regulations would apply to 
individuals who receive scholarship assistance from a funded project. 
Under the proposed regulations, scholarships could be awarded only to 
individuals pursuing degrees, licenses, certifications, or endorsements 
related to special education, related services, or early intervention 
services. An individual who receives training under an IDEA-funded 
personnel preparation project, but does not receive a scholarship from 
that project, would not be subject to the service obligation or payback 
requirements in the proposed regulations.
    Proposed Sec. 304.2, which restates section 673(a) of the Act, 
identifies the

[[Page 37467]]

program and the purposes for which the program provides financial 
assistance.
    Proposed Sec. 304.3 would define key terms used in this part of the 
regulations.
    The definitions of the terms ``related services'' and ``special 
education'' would be the same as those used in Part B of the Act, while 
the proposed definition of ``early intervention services'' would be the 
same as that used in Part C of the Act.
    The proposed definition of ``academic year''--a full-time course of 
study taken for a period totaling at least nine months or for the 
equivalent of at least two semesters, two trimesters, or three 
quarters--is based on the standard term typically used in university 
settings.
    The proposed regulations would require scholars to work full-time 
in a special education, related service, or early intervention position 
following their training in order to ensure that scholarship recipients 
focus on providing services to children with disabilities during the 
period in which they are fulfilling their service obligation. The term 
``full-time'' would mean a full-time equivalent position as defined by 
the individual's employer or by the agencies served by the individual. 
The definition is intended to recognize the wide variety of special 
education, related service, or early intervention settings in which 
scholars might work subsequent to their training. In some instances, it 
should be straightforward to determine whether an individual works for 
one employer (e.g., a school or school district) in a full-time 
equivalent position or works part-time for multiple employers and the 
proportion to a full-time equivalent for each position add up to one 
full time-equivalent job. In other instances, particularly when a self-
employed individual provides related services to children with 
disabilities under Part B, it may be more difficult to determine 
whether the individual works on a full-time basis. In that case, full-
time equivalency would be determined by the school district or agency 
with which the individual is associated to provide Part B or Part C 
services. Questions as to whether an individual's job or jobs meets the 
full-time equivalent requirement shall be determined by the grantee 
institution from which the individual received his or her scholarship. 
Nonetheless, the Secretary is particularly interested in public comment 
on the requirement that IDEA scholars provide special education, 
related services, or early intervention services on a full-time basis 
and seeks suggestions as to how full-time equivalency should be 
measured.
    The proposed definition of ``scholarship'' is based on the 
definition of that term used in other Department of Education programs, 
and would include all disbursements or credits for tuition, fees, 
student stipends, and books, and for travel in conjunction with 
training assignments.
    It should be noted that the term ``scholarship'' does not include 
funding to support assistantships for graduate students at institutions 
of higher education (IHE). Because funding for graduate assistants is 
conditioned on the individual performing work for the IHE, the service 
obligation in the proposed regulations does not apply to that type of 
financial support. Otherwise, the graduate assistants would be required 
to perform dual service obligations: work for the IHE during training 
and work in the special education field after training. The Secretary 
believes that financial support to students enrolled in IDEA personnel 
training projects must be used primarily for scholarship recipients who 
will be subject to the service obligation under the Act. Thus, in order 
to maximize funds available for scholars who must work in the special 
education, related service, or early intervention field, funding for 
graduate assistants is not considered ``scholarship'' assistance. IHE 
grantees that choose to use IDEA funds to pay graduate assistants to 
assist in facilitating or administering projects must classify those 
funds as personnel costs in their grant applications rather than as 
``scholarship'' or ``student support.''

Subpart B--What Conditions Must Be Met by the Grantee?

    Section 304.20 reflects the Secretary's intention to announce for 
each personnel training grant competition a specific percentage, up to 
75 percent, of a grantee's total award that must be used to support 
scholarships. In interpreting the IDEA Amendments of 1997, the 
Secretary believes that Congress intended that a large portion of IDEA 
personnel training funds be used to support scholarships in order to 
ensure that a greater number of qualified individuals will serve 
children with disabilities under Parts B and C of the Act. The 
Secretary shall determine the appropriate percentage of grant funds 
that must be set-aside for scholarships based on the type of projects 
that will be funded under a given grant competition and on the 
Secretary's interest in maximizing the number of scholars who will 
subsequently work in special education, related service, or early 
intervention jobs. The proposed provision would allow the Secretary to 
award grants that use less than the published percentage to pay for 
scholarships in light of the unique nature of a particular project. For 
example, a project in which IDEA funds support only university training 
expenses, while an additional funding source finances student stipends, 
may be exempted from the published percentage. The Secretary notes, 
however, that because financial support for graduate assistants is not 
considered scholarship assistance (see previous discussion), such costs 
may not be paid from the minimum percentage of grant funds that must be 
used to support scholarships.
    Proposed Sec. 304.21 stipulates the types of costs that would be 
allowable under program grants. In short, project funds may be used to 
support costs that are allowable under 34 CFR 75.530 through 75.562 of 
the Education Department General Administrative Regulations (EDGAR) and 
to support scholarships (i.e., tuition, fees, student stipends, and 
books, and travel in conjunction with training assignments).
    Proposed Sec. 304.22 identifies requirements that grantees must 
meet in disbursing scholarships. Proposed paragraph (a) would require 
grantees to ensure that scholarship recipients satisfy certain 
citizenship or residency requirements. Proposed paragraph (b) would 
require grantees to limit the individual's scholarship assistance to 
the amount by which the cost of attendance at the institution exceeds 
the amount of any grant assistance the individual receives under Title 
IV of the Higher Education Act. Proposed paragraph (c) would limit 
scholarship assistance to an individual's cost of attendance for no 
more than four academic years total, with exceptions for extensions 
that are consistent with accommodations provided by the grantee under 
the Americans with Disabilities Act or Section 504 of the 
Rehabilitation Act of 1973.
    Proposed Sec. 304.23 lists the assurances that must be provided by 
a grantee intending to provide scholarships. Under proposed paragraph 
(a), grantees would be required to enter into a written agreement with 
each scholar who receives a scholarship through an IDEA-supported 
personnel training project. That agreement would specify the terms and 
conditions applicable to the scholarship, including the individual's 
service obligation and responsibility to pay back the scholarship if 
the individual fails to satisfy that obligation.
    Proposed paragraph (b) would identify the service obligation 
requirements as they apply to

[[Page 37468]]

scholarship recipients under IDEA personnel training grants. 
Specifically, the proposed provision, which is based on the service 
obligation requirements stated in section 673(h) of the Act, would 
require that any individual who receives a scholarship from a training 
project that prepares personnel to serve children with low- or high-
incidence disabilities (section 673(b) and (e) of the Act) or, in 
appropriate instances as determined by the Secretary, from a training 
project of national significance (section 673(d) of the Act) shall 
subsequently maintain employment: (1) By providing special education 
and related services to children with disabilities or early 
intervention services to infants and toddlers, and their families; (2) 
on a full-time basis; and (3) for a period of at least two years for 
every year for which assistance was received. The service obligation 
would apply beginning after the recipient completes his or her training 
and would need to be completed within the number of years of required 
service (2 years per year of assistance) plus an additional three 
years. For example, a scholar who received two academic years of 
scholarship support would have to perform four years of service within 
seven years from the time the scholar's training ended.
    The Secretary has clarified in the proposed regulations that 
scholars may fulfill their service obligation by providing early 
intervention services under Part C of the Act. Although section 673(h) 
of the Act states that individuals must ``provide special education and 
related services to children with disabilities'', IDEA clearly 
authorizes personnel training projects to prepare personnel to provide 
early intervention services to infants and toddlers with disabilities, 
and their families. The Secretary believes Congress intended to apply 
the service obligation and payback requirements to those who receive 
scholarships from early intervention personnel training projects and 
that early intervention scholars must be permitted to fulfill their 
service obligation by working in the field in which they have been 
trained.
    The requirements in proposed paragraph (b)(2) are particularly 
important to determining whether a former scholar's job would satisfy 
the service obligation requirements in the proposed regulations. That 
provision would require scholars to fulfill their service obligation by 
working in a position or positions ``in which a majority of the persons 
to whom the individual provides services are receiving from the 
individual special education and related services as defined in Part B 
of the Act or early intervention as defined in Part C of the Act.'' In 
other words, a majority of a teacher's students, or a majority of a 
service provider's caseload, must be children or infants and toddlers 
with disabilities. Moreover, the former scholar must actually be 
providing special education, related services, or early intervention 
services to those individuals. The Secretary considers this requirement 
essential in order to ensure that IDEA scholarship monies are used to 
alleviate shortages of qualified special education, related service, or 
early intervention personnel. The Secretary is concerned that without 
this requirement scholars could potentially meet the service obligation 
without addressing the needs of children with disabilities in any 
measurable way. For example, serving as a regular education teacher in 
a class with a sole disabled student, the Secretary believes, is not 
the type of placement envisioned under section 673(h) of the statute. 
An IDEA-supported scholar is free to choose such a profession, but 
would be required to pay back to the Department the amount of 
scholarship assistance received. On the other hand, an individual who 
teaches regular and special education classes, and a majority of the 
teacher's students are receiving special education services from the 
teacher, would satisfy the proposed service obligation requirement. 
Similarly, a speech-language pathologist who serves both children and 
adults with disabilities would satisfy the service obligation provided 
a majority of the provider's caseload are special education students 
under Part B or infants and toddlers with disabilities under Part C.
    Because scholars who enter leadership positions in special 
education do not typically serve a classroom or caseload of students, 
proposed paragraph (b)(3) would apply a somewhat different standard to 
the service obligation for those who receive scholarships from 
leadership training projects (section 673(c) of the Act). Such scholars 
would be required to work full-time, for a period of at least two years 
for each year of assistance, in a position (or positions) in which a 
majority of the scholar's time is expended on work related to his or 
her training (i.e., special education, related service, or early 
intervention leadership). Determinations as to whether a former scholar 
in a leadership position meets this time requirement, or whether any 
scholar meets applicable service requirements, would be made by the 
grantee institution.
    Proposed Sec. 304.23(b)(4) would clarify that the service 
obligation requirements as applied to part-time scholars will be based 
on the accumulated academic years of training for which the scholarship 
is received. As an example, the service obligation for a scholarship 
recipient enrolled half-time in a training project over four years 
would be based on two full academic years of training, meaning that the 
individual must work four years (two years of service per year of 
assistance) in the special education, related service, or early 
intervention field, or pay back the scholarship.
    Proposed section Sec. 304.23(c) through (f) would respectively 
identify grantee assurances related to: scholarship repayment, the 
grantee's standards for measuring a scholar's academic progress, the 
grantee's system for tracking compliance with the service obligation 
requirements, and the grantee's procedures for notifying scholars in 
writing of their service obligation upon their exit from the training 
project. A grantee would provide assurances to the Secretary that it 
has established policies or procedures to address each of these 
requirements, and the remaining requirements in Sec. 304.23, prior to 
receiving a training grant under IDEA.
    Proposed Sec. 304.23(g) and (h) would identify the requirements 
governing maintenance and submission of information related to each 
scholarship recipient. Examples include letter form, grantee-developed 
forms, electronic communications, and other appropriate forms that 
enable grantees to monitor compliance of scholars with the proposed 
regulations.
    Proposed Sec. 304.23(i) would require grantees to notify the 
Secretary at the time an individual has failed to fulfill or has chosen 
not to fulfill the applicable service obligation within the time period 
specified under paragraph (b)(1)(iii) or (b)(3)(iii) so that the 
Secretary may initiate repayment procedures.
    The Secretary emphasizes that both the Act and the proposed 
regulations hold grantee institutions responsible for ensuring that 
scholarship recipients satisfy their service requirements. Accordingly, 
the requirements of Sec. 304.23 are those that the Secretary considers 
necessary for grantees to monitor the compliance of individual scholars 
with their statutory and regulatory obligations.

[[Page 37469]]

Subpart C--What Conditions Must Be Met by the Scholar?

    Proposed Sec. 304.30 would specify the requirements that a scholar 
must meet in order to receive a scholarship under the program. 
Specifically, scholars must: be enrolled in a course of study leading 
to a degree, certificate, endorsement, or license related to special 
education, related services, or early intervention services 
(Sec. 304.30(a)); enter into with the grantee a written agreement 
setting forth the service obligation requirements (Sec. 304.30(b)); 
receive the applicable training at the educational institution or 
agency designated in the scholarship (Sec. 304.30(c)); not accept 
educational allowances from any other entity if that allowance 
conflicts with the individual's obligations under the program 
(Sec. 304.30(d)); maintain satisfactory progress toward the relevant 
degree, certificate, endorsement, or license (Sec. 304.30(e)); and 
provide any information that the grantee needs in order to track the 
scholar's progress in meeting the service obligation (Sec. 304.30(f)).
    Proposed Sec. 304.31 would identify the circumstances under which a 
scholar, who has yet to complete the service obligation, may receive a 
deferral or exemption to the repayment requirement.
    If a former scholar fails to satisfy the applicable service 
obligation, or fails to obtain an authorized deferral or exception, the 
scholar must repay the scholarship to the Secretary in accordance with 
requirements in proposed Sec. 304.32. Proposed paragraph (a) of this 
section would require that the repayment amount be proportional to the 
service obligation that the scholar has failed to complete. For 
example, if a scholar receives two academic years of scholarship 
assistance, teaches special education for two years (rather than the 
requisite four), then stops working or changes careers (in a field 
unrelated to special education, related service, or early 
intervention), the individual would be required to pay back one-half of 
the scholarship assistance received.
    Proposed Sec. 304.32(b) through (d) would specify the requirements 
governing the accrual of interest and assessment of costs that would be 
included as part of the individual's payback obligation. Proposed 
Sec. 304.32(e) would list the various points at which a scholar enters 
repayment status.
    Finally, proposed Sec. 304.32(f) would authorize the Secretary to 
establish a repayment schedule that a scholar in repayment status must 
follow.

Executive Order 12866

1. Potential Costs and Benefits

    These proposed regulations have been reviewed in accordance with 
Executive Order 12866. Under the terms of the order the Secretary has 
assessed the potential costs and benefits of this regulatory action.
    The potential costs associated with the proposed regulations are 
those resulting from statutory requirements and those determined by the 
Secretary as necessary for administering this program effectively and 
efficiently. Burdens specifically associated with information 
collection requirements are identified and explained elsewhere in this 
preamble under the heading Paperwork Reduction Act of 1995.
    In assessing the potential costs and benefits--both quantitative 
and qualitative--of these proposed regulations, the Secretary has 
determined that the benefits of the proposed regulations justify the 
costs.
    To assist the Department in complying with the specific 
requirements of Executive Order 12866, the Secretary invites comment on 
whether there may be further opportunities to reduce any potential 
costs or increase potential benefits resulting from these proposed 
regulations without impeding the effective and efficient administration 
of the program.
Summary of Potential Costs and Benefits
    The following is an analysis of the costs and benefits of the 
proposed regulations that are intended to implement the statutory 
changes made by the IDEA Amendments of 1997. Based on this analysis, 
the Secretary has concluded that the proposed regulations do not impose 
significant costs to grantees under this program. An analysis of the 
specific provisions follows:
    Proposed Sec. 304.1 describes the purposes of the regulations. The 
regulations reflect the essential purpose of the statute, which is to 
ensure that individuals who receive scholarship assistance from 
projects funded under the Personnel Preparation to Improve Services and 
Results for Children with Disabilities Program complete a service 
obligation, or repay all or part of the costs of such assistance. Any 
and all benefits and costs associated with this statutory requirement 
or the proposed regulations flow from this basic requirement. The 
primary beneficiaries of this requirement would be children with 
disabilities and their families. In order for the Federal government to 
justify the expenditure of public funds under this program, certain 
procedures and documentation are necessary to ensure that goals of the 
program are achieved. Since the primary goal of this program is to 
train personnel to provide special education, early intervention, and 
related services to children with disabilities, Congress has determined 
that individuals who benefit from financial assistance under this 
program should return the benefits of that assistance in their field of 
training. The primary benefit of these regulations is to establish a 
process to implement this requirement.
    The cost of this requirement will be borne by the Federal 
government, by grantees who administer scholarship programs, and by 
individuals who receive scholarships from those grantees.
    The costs to grantees will be in establishing written agreements 
with scholars before awarding scholarships, establishing and 
maintaining information systems for tracking the academic progress of 
scholars during training and tracking the progress of scholars in 
meeting their service obligations following training, and in reporting 
to the Secretary when a scholar fails to fulfill the service 
obligation.
    The costs to individual scholarship recipients will be in 
satisfying the service obligation following training, providing 
information to the grantee until completion of the service obligation, 
and in repaying scholarship assistance if the scholar fails to fulfill 
the service obligation.
    Specific estimates of the costs associated with the regulations 
affecting each of these parties is provided below. One person hour is 
assumed to cost $15.00 on average.
    Proposed Sec. 304.2 identifies the program and the purposes for 
which the program provides financial assistance and has no costs 
associated with it.
    Proposed Sec. 304.3 provides definitions of key terms and has no 
costs associated with it.
    Proposed Sec. 304.20 provides information about how the Secretary 
will set parameters on the proportion of grant funds that must be used 
for scholarship assistance. Proposed Sec. 304.21 identifies allowable 
costs under grants. No particular benefits or costs are associated with 
these provisions.
    Proposed Sec. 304.22 includes requirements that grantees must meet 
in disbursing scholarships, including determining the status of 
citizenship and eligibility of a scholar for Federal assistance. The 
regulations would specify citizenship or resident criteria

[[Page 37470]]

for receiving scholarship assistance. An estimated 1,000 person-hours 
per year would be required, at an estimated cost of $15,000 per year 
for all grantees.
    Proposed Sec. 304.23 includes assurances that must be provided by a 
grantee that intends to provide scholarships. The scholar and the 
grantee benefit from this provision which ensures that each has a clear 
understanding of each party's responsibilities prior to the awarding of 
a scholarship. An estimated 7,500 person-hours per year would be 
required, at an estimated cost of $112,500 per year for all grantees.
    Proposed Sec. 304.23(b)(3) includes requirements for fulfilling the 
service obligation as it relates to individuals trained under section 
673(c) of the Act, leadership training. No additional costs are 
associated with this provision.
    Proposed Sec. 304.23(b)(4) clarifies that the service obligation 
requirement as applied to a part-time scholar will be based on the 
accumulated academic years of training for which the scholarship is 
received. This provision does not impose costs on grantees or scholars.
    Proposed Sec. 304.23(c) through (f) include provisions relating to 
repayment of all or part of any scholarship received in the event that 
the service obligation is not fulfilled. The Federal agency must 
collect repayment of scholarship funds from a scholar who fails to meet 
the service obligation. Grantees must establish policies and 
procedures, including a tracking system, to determine the compliance of 
scholars with the terms of the agreement the scholars entered with the 
grantee. This one-time cost will vary considerably depending on 
existing data systems at grantee institutions. An estimated 12,500 
person-hours per year would be required, at an estimated cost of 
$187,500 per year for all grantees. Grantees must establish policies 
and procedures for receiving written exit certification from scholars 
that identifies, among other things, the number of years the scholar 
needs to work to fulfill the service obligation. An estimated 10,000 
person-hours per year would be required, at an estimated cost of 
$150,000 per year for all grantees.
    Proposed Sec. 304.23(g) and (h) require the grantee to provide 
necessary information on a scholar, upon request of the Secretary, and 
to maintain such information for a period of time equal to the time 
required to fulfill the service obligation. An estimated 100,000 
person-hours per year would be required, at an estimated cost of 
$1,500,000 per year for all grantees.
    Under Sec. 304.23(i), the grantee must inform the Secretary if a 
scholar fails to fulfill the service obligation. Starting in the fourth 
or fifth year of the program, an estimated 1,500 person-hours per year 
would be required for an approximation of 75 cases per year, at an 
estimated cost of $22,500 in staff time and correspondence for all 
grantees.
    Proposed Sec. 304.30(a) through (f) require that a scholar: be 
enrolled in a course of study leading to a degree, certificate, 
endorsement, or license related to special education, related services, 
or early intervention services; enter into a written agreement with the 
grantee before starting training; and be trained at the educational 
institution or agency designated in the scholarship. These decisions 
are made by scholars in advance of accepting scholarship assistance and 
are conditions for receiving such assistance. Therefore no costs are 
associated with the requirements under this provision.
    Proposed Sec. 304.31 would provide procedures whereby a scholar 
could request a deferral or exception to performance of the service 
obligation or repayment. The costs associated with this requirement 
would be negligible.
    Proposed Sec. 304.32(a) through (d) delineate the monetary payback 
provisions that would apply if a scholar failed to meet the terms and 
conditions of a scholarship agreement or to obtain a deferral or an 
exception to performance or repayment. There are no additional costs 
associated with these provisions.
    Proposed Sec. 304.32(e) specifies when a scholar enters repayment 
status. Proposed Sec. 304.32(f) requires the scholar to make payments 
to the Secretary that cover principal, interest, and collection costs 
according to a schedule established by the Secretary. There are no 
additional costs associated with these provisions.

2. Clarity of the Regulations

    Executive Order 12866 requires each agency to write regulations 
that are easy to understand.
    The Secretary invites comments on how to make these proposed 
regulations easier to understand, including answers to questions such 
as the following: (1) Are the requirements in the proposed regulations 
clearly stated? (2) Do the proposed regulations contain technical terms 
or other wording that interferes with their clarity? (3) Does the 
format of the proposed regulations (grouping and order of sections, use 
of headings, paragraphing, etc.) aid or reduce their clarity? Would the 
proposed regulations be easier to understand if they were divided into 
more (but shorter) sections? (A ``section'' is preceded by the symbol 
``Sec. '' and a numbered heading; for example, Sec. 304.23 What 
assurances must be provided by a grantee that intends to provide 
scholarships? (4) Is the description of the proposed regulations in the 
Supplementary Information section of this preamble helpful in 
understanding the proposed regulations? How could this description be 
more helpful in making the proposed regulations easier to understand? 
(5) What else could the Department do to make the proposed regulations 
easier to understand?
    A copy of any comments that concern how the Department could make 
these proposed regulations easier to understand should be sent to 
Stanley M. Cohen, Regulations Quality Officer, U.S. Department of 
Education, 600 Independence Avenue, SW. (room 5121, FB-10B), 
Washington, DC 20202-2241.

Regulatory Flexibility Act Certification

    The Secretary certifies that these regulations would not have a 
significant economic impact on a substantial number of small entities. 
The entities that would be affected by these proposed regulations are 
institutions of higher education that participate in programs under 
Part D of IDEA. These institutions are defined as ``small entities,'' 
according to the U.S. Small Business Administration Size Standards, if 
they are for-profit or nonprofit institutions with total annual revenue 
below $5,000,000 or if they are institutions controlled by governmental 
entities with populations below 50,000. These proposed regulations 
impose minimal requirements to implement the statutory provisions and 
would not have a significant economic impact on the small entities 
affected.

Paperwork Reduction Act of 1995

    Sections 304.22, 304.23, 304.30, 304.31, and 304.32 contain 
information collection requirements. As required by the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3507(d)), the Department of Education 
has submitted a copy of these sections to the Office of Management and 
Budget (OMB) for its review. The Secretary notes that each grantee has 
the discretion to determine the method(s) by which it will collect and 
maintain information.

Collection of Information: Special Education--Personnel Preparation 
To Improve Services and Results for Children With Disabilities

    Annual reporting and record keeping burden for this collection of 
information is estimated to average 285 hours per

[[Page 37471]]

year per grantee, or 142,500 hours for 500 grantees. The burden for 
scholars is approximately 1.3 hours per year for each scholar, or a 
total of 10,000 hours for a projected 7,500 scholars per year. These 
estimates include the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the various collections of information. Thus, 
the total annual reporting and record keeping burden for this 
collection at the full operation of the program is estimated to be 
157,500 hours.
    Organizations and individuals desiring to submit comments on the 
information collection requirements should direct them to the Office of 
Information and Regulatory Affairs, OMB, room 10235, New Executive 
Office Building, Washington, DC 20503; Attention: Desk Officer for U.S. 
Department of Education.
    The Department considers comments by the public on this proposed 
collection of information in--
     Evaluating whether the proposed collection of information 
is necessary for the proper performance of the functions of the 
Department, including whether the information will have practical use;
     Evaluating the accuracy of the Department's estimate of 
the burden of the proposed collections of information, including the 
validity of the methodology and assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     Minimizing the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology; e.g., permitting 
electronic submission of responses.
    OMB is required to make a decision concerning the collections of 
information contained in these proposed regulations between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment to OMB is best assured of having its full effect 
if OMB receives it within 30 days of publication. This does not affect 
the deadline for the public to comment to the Department on the 
proposed regulations.

Intergovernmental Review

    This program is subject to the requirements of Executive Order 
12372 and the regulations in 34 CFR part 79. The objective of the 
Executive order is to foster an intergovernmental partnership and a 
strengthened federalism by relying on processes developed by State and 
local governments for coordination and review of proposed Federal 
financial assistance.
    In accordance with the order, this document is intended to provide 
early notification of the Department's specific plans and actions for 
this program.

Assessment of Educational Impact

    The Secretary particularly requests comments on whether the 
proposed regulations in this document would require transmission of 
information that is being gathered by or is available from any other 
agency or authority of the United States.

Electronic Access to This Document

    Anyone may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or 
portable document format (pdf) on the World Wide Web at either of the 
following sites:

http://ocfo.ed.gov/fedreg.htm
http://www.ed.gov/news.html

To use the pdf you must have the Adobe Acrobat Reader Program with 
Search, which is available free at either of the previous sites. If you 
have questions about using the pdf, call the U.S. Government Printing 
Office at (202) 512-1530 or, toll free at 1-888-293-6498.
    Anyone may also view these documents in text copy only on an 
electronic bulletin board of the Department. Telephone: (202) 219-1511 
or, toll free, 1-800-222-4922. The documents are located under Option 
G--Files/Announcements, Bulletins and Press Releases.

    Note: The official version of this document is the document 
published in the Federal Register.

List of Subjects in 34 CFR Part 304

    Grant programs--children with disabilities, special education, 
Personnel preparation, Reporting and record keeping requirements.

    Dated: June 24, 1998.
Judith E. Heumann,
Assistant Secretary for Special Education and Rehabilitative Services.

(Catalog of Federal Domestic Assistance Number 84.325, Special 
Education--Personnel Preparation to Improve Services and Results for 
Children with Disabilities)

    The Secretary proposes to amend title 34 of the Code of Federal 
Regulations by revising Part 304 to read as follows:

PART 304--SPECIAL EDUCATION--PERSONNEL PREPARATION TO IMPROVE 
SERVICES AND RESULTS FOR CHILDREN WITH DISABILITIES

Subpart A--General

Sec.
304.1  Purpose.
304.2  What is the Special Education--Personnel Preparation to 
Improve Services and Results for Children with Disabilities Program?
304.3  What regulations apply to this part?
304.4  What definitions apply?

Subpart B--What Conditions Must Be Met by the Grantee?

304.20  What are the requirements for directing grant funds?
304.21  What are allowable costs?
304.22  What are the requirements for grantees in disbursing 
scholarships?
304.23  What assurances must be provided by a grantee that intends 
to provide scholarships?

Subpart C--What Conditions Must Be Met by the Scholar?

304.30  What are the requirements for scholars?
304.31  What are the requirements for obtaining a deferral or 
exception to performance or repayment under an agreement?
304.32  What are the consequences of a scholar's failure to meet the 
terms and conditions of a scholarship agreement?

    Authority: (20 U.S.C. 1473).

Subpart A--General


Sec. 304.1  Purpose.

    Individuals who receive scholarship assistance from projects funded 
under the Special Education--Personnel Preparation to Improve Services 
and Results for Children with Disabilities Program are required to 
complete a service obligation, or repay all or part of the costs of 
such assistance, in accordance with section 673(h) of the Individuals 
with Disabilities Education Act and the regulations of this part.

(Authority: 20 U.S.C. 1473(h))


Sec. 304.2  What is the Special Education--Personnel Preparation to 
Improve Services and Results for Children With Disabilities Program?

    The Special Education--Personnel Preparation to Improve Services 
and Results for Children with Disabilities Program (program) provides 
financial assistance under section 673 of the Act to--
    (a) Help address State-identified needs for qualified personnel in 
special education, related services, early intervention, and regular 
education, to work with children with disabilities; and
    (b) Ensure that those personnel have the skills and knowledge, 
derived from

[[Page 37472]]

practices that have been determined, through research and experience, 
to be successful, that are needed to serve those children.

(Authority: 20 U.S.C. 1473(a))


Sec. 304.3  What definitions apply to this program?

    (a) Definitions in EDGAR. The following terms used in this part are 
defined in 34 CFR 77.1:

Applicant
Award
Department
EDGAR
Grantee
Project
Recipient
Secretary

    (b) The following definitions apply to this program: Academic year 
means a full-time course of study--
    (1) Taken for a period totaling at least nine months; or
    (2) Taken for the equivalent of at least two semesters, two 
trimesters, or three quarters.
    Act means the Individuals with Disabilities Education Act, 20 
U.S.C. 1400 et seq.
    Early intervention services means early intervention services as 
defined in section 632(4) of the Act.
    Full-time, for purposes of determining whether an individual is 
employed full-time in accordance with Sec. 304.23, means a full-time 
equivalent position as defined by the individual's employer or by the 
agencies served by the individual.
    Payback means monetary repayment of scholarship assistance in lieu 
of completion of a service obligation.
    Related services means related services as defined in section 
602(22) of the Act.
    Scholar means an individual who is pursuing a degree, license, 
endorsement, or certification related to special education, related 
services, or early intervention services and who receives scholarship 
assistance under this part.
    Scholarship means financial assistance to a scholar for training 
under the program and includes all disbursements or credits for 
tuition, fees, student stipends, and books, and travel in conjunction 
with training assignments.
    Service obligation means a scholar's employment obligation, as 
described in section 673(h) of the Act and Sec. 304.23(b) of this part.
    Special education means special education as defined in section 
602(25) of the Act.
(Authority: 20 U.S.C. 1473(h))


Sec. 304.4  What regulations apply to this program?

    The following regulations apply to this program:
    (a) The Education Department General Administrative Regulations 
(EDGAR) in the following part of title 34 of the Code of Federal 
Regulations:
    (1) Part 74 (Administration of Grants to Institutions of Higher 
Education, Hospitals, and Nonprofit Organizations).
    (2) Part 75 (Direct Grant Programs).
    (3) Part 77 (Definitions That Apply to Department Regulations). '
    (4) Part 79 (Intergovernmental Review of Department of Education 
Programs and Activities).
    (5) Part 80 (Uniform Administrative Requirements for Grants and 
Cooperative Agreements to State and Local Governments).
    (6) Part 81 (General Education Provisions Act--Enforcement).
    (7) Part 82 (New Restrictions on Lobbying).
    (8) Part 85 (Governmentwide Debarment and Suspension 
(Nonprocurement) and Governmentwide Requirements for Drug-Free 
Workplace (Grants)).
    (9) Part 86 (Drug-Free Schools and Campuses).
    (b) The regulations in this part 304.

(Authority: 20 U.S.C. 1473; 20 U.S.C. 3474(a)

Subpart B--What Conditions Must Be Met by the Grantee?


Sec. 304.20  What are the requirements for directing grant funds?

    (a) The Secretary shall, as appropriate, identify in a notice 
published in the Federal Register, the percentage (up to 75 percent) of 
a total award under the program that must be used to support 
scholarships as defined in Sec. 304.3.
    (b) The Secretary may award grants that use less than the 
percentage published under paragraph (a) of this section for 
scholarships based upon the unique nature of a project.

(Authority: 20 U.S.C. 1473(h))


Sec. 304.21  What are allowable costs?

    In addition to the allowable costs established in the Education 
Department General Administrative Regulations in 34 CFR 75.530 through 
75.562, the following items are allowable expenditures by projects 
funded under the program:
    (a) Tuition and fees.
    (b) Student stipends and books.
    (c) Travel in conjunction with training assignments.

(Authority: 20 U.S.C. 1473(h))


Sec. 304.22  What are the requirements for grantees in disbursing 
scholarships?

    Before disbursement of scholarship assistance to an individual, a 
grantee shall--
    (a) Ensure that the scholar--
    (1) Is a citizen or national of the United States;
    (2) Provides evidence from the U.S. Immigration and Naturalization 
Service that he or she--
    (i) Is a permanent resident of the United States; or
    (ii) Is in the United States for other than a temporary purpose 
with the intention of becoming a citizen or permanent resident; or
    (3) Has a permanent or lasting--as distinguished from temporary--
principal, actual dwelling place in fact, without regard to intent, in 
the Republic of the Marshall Islands, the Federated States of 
Micronesia, or Palau (during the period in which those entities are 
eligible to receive an award under the program) or the Commonwealth of 
the Northern Mariana Islands.
    (b) Limit scholarship assistance to the amount by which the 
individual's cost of attendance at the institution exceeds the amount 
of grant assistance the scholar is to receive for the same academic 
year under Title IV of the Higher Education Act;
    (c) Limit scholarship assistance to the individual's cost of 
attendance at the institution, consistent with paragraph (b), for no 
more than a total of four academic years, except that the grantee may 
provide an extension consistent with the institution's accommodations 
under the Americans with Disabilities Act or Section 504 of the 
Rehabilitation Act of 1973, if the grantee determines that an 
individual has a disability that seriously affects the completion of 
the course of study;
    (d) Obtain a Certification of Eligibility for Federal Assistance 
from each scholar, as prescribed in 34 CFR 75.60, 75.61, and 75.62.

(Authority: 20 U.S.C. 1473)


Sec. 304.23  What assurances must be provided by a grantee that intends 
to provide scholarships?

    A grantee that intends to grant scholarships under the program 
shall provide the following assurances before receiving an award:
    (a) Requirement for agreement. Each scholar who will receive a 
scholarship will first enter into a written agreement with the grantee 
that contains the terms and conditions required by this section.
    (b) Terms of the agreement. Each agreement under paragraph (a) of 
this section shall contain, at a minimum, the following provisions:

[[Page 37473]]

    (1) Individuals who receive scholarship assistance from projects 
funded under section 673(b) and (e), and to the extent determined 
appropriate by the Secretary, section 673(d), of the Act will 
subsequently maintain employment--
    (i) In which the individual provides special education and related 
services to children with disabilities or early intervention services 
to infants and toddlers, and their families;
    (ii) On a full-time basis; and
    (iii) For a period of at least two years for every year for which 
assistance was received, within a period, beginning after the recipient 
completes the training for which the scholarship assistance was 
provided, of not more than the sum of the number of years required in 
this paragraph and three additional years.
    (2) In order to meet the requirements of paragraph (b)(1) of this 
section, an individual must be employed in a position in which a 
majority of the persons to whom the individual provides services are 
receiving from the individual special education and related services as 
defined in Part B of the Act or early intervention services as defined 
in Part C of the Act.
    (3) Individuals who receive scholarship assistance from a 
leadership preparation project funded under section 673(c) of the Act 
will subsequently maintain employment--
    (i) In which the individual expends a majority of his or her time 
performing work related to the individual's preparation;
    (ii) On a full-time basis; and
    (iii) For a period of at least two years for every year for which 
assistance was received, within a period, beginning after the recipient 
completes the training for which the scholarship assistance was 
awarded, of not more than the sum of the number of years required in 
this paragraph and three additional years.
    (4) The service obligation in this subsection as applied to a part-
time scholar will be based on the accumulated academic years of 
training for which the scholarship is received.
    (c) Repayment. (1) Subject to the provisions in Sec. 304.31 
regarding a deferral or exception, a scholar who does not fulfill the 
requirements in paragraph (b)(1) or (b)(3) of this section, as 
appropriate, shall repay all or part of any scholarship received, plus 
interest.
    (2) The amount of the scholarship that has not been retired through 
eligible service will constitute a debt owed to the United States 
that--
    (i) Will be repaid by the scholar in accordance with Sec. 304.32; 
and
    (ii) May be collected by the Secretary in accordance with 34 CFR 
part 30, in the case of the scholar's failure to meet the obligation of 
Sec. 304.32.
    (d) Standards for satisfactory progress. The grantee shall 
establish, notify students of, and apply reasonable standards for 
measuring whether a scholar is maintaining satisfactory progress in the 
scholar's course of study;
    (e) Tracking system. The grantee has established policies and 
procedures, including a tracking system, to determine compliance of 
scholars with the terms of the written agreement developed under this 
section;
    (f) Exit certification. The grantee has established policies and 
procedures for receiving written certification from scholars at the 
time of exit from the program that identifies--
    (1) The number of years the scholar needs to work to satisfy the 
work requirements in paragraph (b) of this section.
    (2) The total amount of scholarship assistance received subject to 
the work-or-repay provision in paragraph (b) of this section.
    (3) The time period, consistent with paragraphs (b)(1)(iii) or 
(b)(3)(iii) of this section, during which the scholar must satisfy the 
work requirements in paragraph (b) of this section.
    (4) All other obligations of the scholar under this section.
    (g) Information. The grantee shall provide, upon request of the 
Secretary, information, including records maintained under paragraphs 
(e) and (f) of this section, that is necessary to carry out the 
Secretary's functions under this part.
    (h) Records. The grantee shall maintain the information under this 
section related to a scholar for a period of time equal to the time 
required to fulfill the obligation under paragraph (b) of this section.
    (i) Notification. The grantee shall inform the Secretary if a 
scholar fails to fulfill or chooses not to fulfill the obligation under 
paragraph (b)(1) or (b)(3) of this section.

(Authority: 20 U.S.C. 1473(h))

Subpart C--What Conditions Must be met by the Scholar?


Sec. 304.30  What are the requirements for scholars?

    A scholar shall--
    (a) Be enrolled in a course of study leading to a degree, 
certificate, endorsement, or license related to special education, 
related services, or early intervention services in order to be 
eligible to receive a scholarship under the program;
    (b) Enter into a written agreement with the grantee that meets the 
terms and conditions of Sec. 304.23 of this part before starting 
training;
    (c) Receive the training at the educational institution or agency 
designated in the scholarship;
    (d) Not accept payment of educational allowances from any other 
entity if that allowance conflicts with the scholar's obligation under 
this part; and
    (e) Maintain satisfactory progress toward the degree, certificate, 
endorsement, or license as determined by the grantee.
    (f) Provide information necessary for the grantee to track the 
scholar's progress in meeting the service obligation under 
Sec. 304.23(b).

(Authority: 20 U.S.C. 1473(h))


Sec. 304.31  What are the requirements for obtaining a deferral or 
exception to performance or repayment under an agreement?

    (a) An exception to the repayment requirement in Sec. 304.23(c) may 
be granted, in whole or part, if the scholar--
    (1) Is unable to continue the course of study or perform the 
service obligation because of a disability that is expected to continue 
indefinitely; or
    (2) Has died.
    (b) Deferral of the repayment requirement in Sec. 304.23(c) may be 
granted during the time the scholar--
    (1) Is engaging in a full-time course of study at an institution of 
higher education;
    (2) Is serving, not in excess of three years, on active duty as a 
member of the armed services of the United States;
    (3) Is serving as a volunteer under the Peace Corps Act;
    (4) Is serving as a full-time volunteer under Title I of the 
Domestic Volunteer Service Act of 1973;
    (5) Has a disability which prevents the individual from working, 
for a period not to exceed three years; or
    (6) Is unable to secure employment as required by the agreement by 
reason of the care provided to a disabled family member for a period 
not to exceed 12 months.
    (c) Deferrals or exceptions to performance or repayment may be 
provided by grantees based upon sufficient evidence to substantiate the 
grounds for an exception under paragraph (a) of this section or a 
deferral under paragraph (b) of this section.

(Authority: 20 U.S.C. 1473(h))


Sec. 304.32  What are the consequences of a scholar's failure to meet 
the terms and conditions of a scholarship agreement?

    If a scholar fails to meet the terms and conditions of a 
scholarship agreement

[[Page 37474]]

under Sec. 304.23(b) or to obtain a deferral or an exception as 
provided in Sec. 304.31, the scholar shall repay all or part of the 
scholarship assistance to the Secretary as follows:
    (a) Amount. The amount of the scholarship to be repaid is 
proportional to the service obligation not completed.
    (b) Interest Rate. The Secretary charges the scholar interest on 
the unpaid balance owed in accordance with 31 U.S.C. 3717.
    (c) Interest accrual. (1) Interest on the unpaid balance accrues 
from the date the scholar is determined to have entered repayment 
status under paragraph (e) of this section.
    (2) Any accrued interest is capitalized at the time the scholar's 
repayment schedule is established.
    (3) No interest is charged for the period of time during which 
repayment has been deferred under Sec. 304.31.
    (d) Collection costs. Under the authority of 31 U.S.C. 3717, the 
Secretary may impose reasonable collection costs.
    (e) Repayment status. A scholar enters repayment status on the 
first day of the first calendar month after the earliest of the 
following dates, as applicable:
    (1) The date the scholar informs the grantee that he or she does 
not plan to fulfill the service obligation under the agreement.
    (2) Any date when the scholar's failure to begin or maintain 
employment makes it impossible for that individual to complete the 
service obligation within the number of years required in 
Sec. 304.23(b).
    (3) Any date on which the scholar discontinues enrollment in the 
course of study under Sec. 304.30(a).
    (f) Amounts and frequency of payment. The scholar shall make 
payments to the Secretary that cover principal, interest, and 
collection costs according to a schedule established by the Secretary.

(Authority: 20 U.S.C. 1473(h))

[FR Doc. 98-18303 Filed 7-9-98; 8:45 am]
BILLING CODE 4000-01-P